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Summary: Boring lifestyles of American Millionaires
Review: The book is mostly very repetitive in explanation. I must admit that what the authors examine is actually the key secrets of the rich in America but personally speaking the lifestyles they have is mundane, boring and frankly too frugal to enjoy what they make. Imagine that some millionaires haven't even travel overseas. A must read if you are a spendthrift but otherwise take it in liberal doses.
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Summary: A thin borderline...
Review: Many who disagrees with the issues discussed in the book complains about the extreme frugality displayed within those millionaries exemplified in the book. It is true that sound investing and saving is the key to success to become a millionaire. But many may aggre with me that what is the joy of being a millionaire if you life as a miser and doesn't spend a penny o it. As I read I somehow believed that sooner or later the authors would mention the rewards of one's frugality as they mention it. "Save the best for last" -- one may say, but how long should one wait, and save, to enjoy what they have accomplished with pain and sweat? It is a thin borderline, too far from it in either side is just as unhealthy as the other. Rich or poor, extremes also pays their prices.
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Summary: A few major missed points.
Review: Interesting book overall, but they missed a few points. Being inherently frugal myself (I found it in a library) and a former academic, I was interested in the methods section more than most people.In their research methods, they identify that these millionares they found were primarily business owners, and then define their wealth accumulation based upon that. Seems to me most business owners have a disproportionate amount of wealth in their business itself, and they may not pull in a heck of a lot of income from it to keep driving the business. Yes, it is wealth, but it is also unrealized and inherently risky wealth. This kinda blows the UAW and PAW theory to hell when you consider business equity. Also, it certainly looks to me like these people who are frugal and 'wealthy' gather up tons of money and then blow it on thier kids. THe kids, as defined by the book, are naturally spoiled by the gifts and basically blow the parents money. So it looks to me like these people scrimped and saved so that their children could blow their fortune in a way detrimental to the children's welfare. Looks to me the moral of the book is: misers certainly look good on paper, but whats the point of looking good on paper?
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Summary: Penny pinchers revenge on the Jones'es
Review: I'll take 5 more copies for my family. Mayby they will see that buying stuff is not the way of becoming rich. This book took the pressure off of keeping up with the Jones'es and helped me to look for lasting value in my purchases. Hollywood, go to hell.
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Summary: Great concepts for a progressive lifestyle
Review: There is a saying that "Simplicity is a Virtue." I do not remember where I heard this saying but it would definitely apply to this book. Sometimes I feel that this is too conservative but more often than not is right on the money. Above all, one must draw the line between being too obsessive with money and spending money wisely. Although money should NOT be wasted, money STILL cannot buy happiness! Yes, if you read the "guidelines" appropriately, you CAN have your cake and eat it too!
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Summary: My father was right!
Review: This book underscored everything my dad taught me about saving money. Kids entering the workforce today should have this book as required reading. If you want to be financially independant, READ THIS BOOK!!!
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Summary: Printing is so small you'll need strong eyeglasses to read!
Review: Good, but paperback needs larger print
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Summary: Stanley & Danko: Garbage IN, garbage OUT!
Review: When I read this book, I was SO appalled at the POOR QUALITY of the research and conclusions that I wrote a letter to the authors. I sent it to them on 1 JUN, '98, in care of their publisher. I have YET to receive a response. I reproduce the content of this letter below as a WARNING to anyone who might be misled by the authors' SEEMINGLY "scientific" analysis:---------I am writing to you about your research on "the wealthy" reported in your recent book, The Millionaire Next Door. I believe that there are serious problems with your research methodology and I would like to point out what I think they are and obtain your response. First, and most importantly, there is the issue of how you choose to define someone¹s "expected level of net worth." You are careful to state that you define "expected net worth" as [(current pre-tax income*age)/10].As a former teacher of Philosophy of Science, measurement theory and statistical methodology, I knew the moment I saw your description of this measure exactly what your findings would be. Your measure asserts that people, at any stage of their lives, should have a net worth equivalent to what they would get if they put aside 1/10th of their current income for each year of their lives. Why, I asked myself, does this measure appear nonsensical? Then I realized that it was because it is biased in favor of calling people, in your terms, "Prodigious Accumulators of Wealth" or "PAWs" if they leave school early, take a job or go into business, get a salary which does not vary much from year to year, and then engage in a regimen of self denial that would make your average, everyday sort of miser look like a spendthrift by comparison. For such a person, there are few "no-income" or "low-income" years (like those associated with going to school for a long time) to have to make up for later. In addition, there is little likelihood that, when you interview them, these "wealthy" individuals will have recently obtained a large raise due to, say, having had an exceptionally high-scoring year (as professional Baseball or Football players might) or developing a new drug to, e.g., fight cancer or AIDS.Thus, many people who are "PAWs" by your measure are decidedly NOT what most people think of when they are asked what it means to be "wealthy." In particular, they get none of the benefits that wealth is supposed to confer on its holders. The main benefit of wealth for such people seems to be the great pleasure that they take in the sheer possession of money, itself! This is thoroughly contrary to most peoples' intuition regarding the actual meaning of the term "wealth." Are people who love simply the possession of money itself not just as pitiable as those who, with an enormous income, squander it all (or nearly all) and, as a result, have a net worth near zero (by the way, are there such people?). More to the point, doesn¹t your measure, by its very nature, fail to capture the theoretical concept of "wealth" shared by most people (including most professional Economists)? I argue that it does and that, by selecting it, you have RIGGED the outcome to paint a picture of the "wealthy" that may not be accurate.My mother, for example, was a child of the Great Depression, she placed great value on the sheer possession of money. This was understandable given her abject fear of what might happen if there were to be another Great Depression. Over her lifetime she managed, having gone to work as a teen-ager, on a rather small income, that didn¹t vary much year-to-year, to put away an amazingly large amount of savings relative to her income. She was a "PAW" times 10. BUT, the value she placed on money per se was so irrationally high that she never, until long after her retirement, permitted herself any of the comforts or advantages that her money COULD have provided for her without doing any significant harm to her accumulated "stockpile" of the stuff.Is THIS the kind of behavior we want to encourage? Miserliness? Stinginess ("I am my favorite charity" says your protoypical "PAW" on p. 11)? Clearly, not even YOU really think so. On p. 74 of your book you warn AGAINST the very life-strategy stemming logically from your own measure - dropping out young and going into business. What kind of Economists ARE you? Do you not have enough faith in your own measures to do what they tell you? How do you think people would react if the inventors of modern portfolio theory had said "All the people who¹ve done really well in the market have followed this approach, but we don¹t encourage anyone to try it"? This is nonsense! Either you believe your research or you don¹t. If you don¹t even believe your own definition of what "wealth" really is, how can you expect the rest of us to believe it or to take seriously anything else you have to say? The truth is that what your measure has REALLY identified with its "PAW" classification is NOT those who are "wealthy" but those who have a masochistic love of self denial. Let¹s be HONEST and call them "Masochistic Self Deniers" or "MSDs" for short.Now we come to the second methodological problem with your work. The fact is that the tendency of your measure to identify MSDs as "wealthy" (through the trick of the "PAW" classification) is exacerbated by your admitted focus on the "first-generation rich." The problem here is that, unless one happens to BE Michael Jordan or Michael Eisner or Peter Lynch, the ONLY way to obtain a net worth over $1 million in a single lifetime is by being an "MSD."Thus, again, you RIG the game. Your own methodology pre-determines the outcome of your research. The "seven factors" you tout on pp 3-4 of your book are NOT the ONLY way to "wealth." What they ARE is the only way to wealth on a middle-class salary in one generation. Ho-Hum. Tell me something I didn¹t know before I picked up your book.I am sorry to tell you this, but I must conclude that your research is, at best, useless and, at worst, highly misleading (in that, as you admit, it SEEMS to say that the road to "wealth" runs through ³drop-out city² and "Drudge-job/Small Business Gulch.").It may, however, be possible to salvage your work to some extent and even, perhaps, arrive at some counter-intuitive findings. This can be done by CORRECTING the measure to account for its obvious bias. A simple way to do this would be to define "expected net worth" as [(current pre-tax income*(age-21))/10]. This would reduce the advantage the measure gives to young drop-outs who, for whatever reason, get steady, low-paying jobs, and remove some of the penalty placed on those who go to college. A better correction would be to tailor the model to each individual by defining "expected wealth" as N [(SUM Wi)/N] i=1where N is the number of years the individual has been employed and W is the individual¹s wage or salary for each year of the "N" years of their working life. This approach is clearly more complex and may require additional data. BUT, it would treat young drop-outs, Medical Doctors and, yes, even basketball players, fairly. In particular, it would not only remove the advantage your measure gives to young dropouts, it would ALSO remove the penalty that your measure places on those whose yearly incomes do not fall on a smooth curve. Would these modifications change significantly your conclusions regarding the Socio-Psychological correlates of wealth? I don¹t know. BUT, I suspect that many more well-paid professionals who choose to enjoy some of their incomes rather than live like Silas Marner, would be included in the ranks of PAWs. THIS will have the effect of significantly altering your findings regarding the habits and beliefs of "the wealthy."Another point. You state, as another criterion for being a PAW, that one must have a "go-to-hell fund" equivalent to at least ten years of one¹s living expenses. I would really like to know how you arrived at the figure of ten years. Why not seven, five or three? How sensitive are your Socio-Psychological findings to the choice of which number is used?Finally, one last point. You write (on p. 4) that you hope that your book will stimulate others to "learn how to develop" in themselves the qualities exhibited by "the wealthy" (i.e., by MSDs). I find that a very difficult sentiment to understand coming from an Economist. Any REAL Economist would know that there is no way in which one can validly assert that Mr. X¹s values are "better" than Mr. Y¹s; that those who gain greatest happiness from from counting the number of dollars they have made at the end of each day while dressing and eating like beggars are "better" or "happier" than those who gain greatest happiness from owning a $2000 suit
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Summary: A truly horrible book.
Review: Repetitious and insubstantial. One of the few books I have ever returned to a bookstore to get my money back.
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Summary: carpe diem vs. saving
Review: Although simplistic and repetitive, I am glad that I read this book. The notion of deferring dollars and pleasures for a later day, is one I will gladly have repeated to me. It is a no-brainer for some people and I can see why there are one-stars given. I can also see why people rave about it...self-help sells. I think wisdom falls somewhere between the philiosophy of these authors and the carpe diem mentality. I probably lean towards the notion of saving, you can 'seize the day' without driving a new BMW.
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